1. 1. Explain the difference between “commodity” and “fiat” money. 2. Because the melt value of a pure copper penny is $.03, how are pennies now made?

2.  In 1913, Congress established the Federal Reserve system.  The “Fed” is the nation’s central bank. It helped finance WWI (1914-18), but failed to control credit in the 1920s, leading to Great Depression.

3.  An institution that lends money, accepts deposits, and transfers money between individuals.  Provide 40% of all mortgage loans.  Bank of America is the largest in the U.S.

4. Computers that allow transactions to affect accounts immediately. 4 main types: 1. Automated teller machines (ATM) 2. Automatic clearing house services (electric bill) 3. Point-of-sale terminals (debit card) 4. Home banking (Internet)

5.  Deregulation is the reduction of government services.  This has resulted in more competitive banking, and an increase in regional banks in the U.S.  Has allowed banks to compete with credit unions to issue car loans.  Traveler’s checks & money orders are now available many places.